Citroen warranties halved by new Australian distributor

WARRANTIES on Citroen cars have been wound back as the French brands’ new Australian distributor hits the reset button on its dealer network.

The UK-owned Inchcape, which also distributes Subaru products in Australia, has cut the warranties on new cars back from the six-year term – the three-year factory-backed warranty was extended for another three years by the brands’ former distributor, Malaysia-owned Sime Darby – to just three. Inchcape says it will continue to honour existing extended Citroen warranties.

It is also rationalising the distributor network, which includes ending retail deals with some of Australia’s oldest family-owned Citroen dealerships, as it prepares to give a jolt to the slow sales start for the Groupe PSA products in the wake of the distributorship handover.

Inchcape said rationalising the Citroen and Peugeot dealer network in Australia was important to the brands’ success. However, a proposal to the network’s 34 dealers to sell both Peugeot and Citroen products – some of them are standalone Citroen dealerships – meant that some Citroen-only dealers had elected to stop selling new cars, and instead only service them and trade in used vehicles.

“The network strategy was put in place to help increase the overall financial viability of the dealer network and to consolidate the Peugeot and Citroen brands,” spokeswoman Jemma White said. “Inchcape Australia’s current plan is to have 35 Peugeot and Citroen dealerships nationally by January 2018, subject to brand performance and market pressures.”

Wheels believes the agreements with the dealer network all came up for renewal in the wake of Sime Darby’s decision to exit the business, sparking the rationalisation.

Dealers are also believed to have been hit hard by a lack of new Groupe PSA cars flowing into Australia – another legacy of the handover to Inchcape. One told Wheels he had been “haemorrhaging money” while waiting for new stock to be built and shipped over to Australia.

Another source told Wheels that Inchcape would adapt what it learned from selling Subaru products via pop-up stores in public spaces such as supermarkets to help build sales, with inquiries fed back to dealerships. It has already trialled the retail strategy with the recently launched Peugeot 3008 – a Wheels Car of the Year contender.

Citroen has recently launched the facelifted C3 city car in Australia, which sells from $23,990 – a big discount on the previous model’s $25,000-plus price tag – as Inchcape looks at prices across the range.

Peugeot and Citroen have a long history with Australia. A French-made Citroen was the first car to circumnavigate Australia and is housed in the National Museum of Australia. Peugeot even built cars here, assembling knocked-down models including the 403, 404, and the 504.

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